Corporate carbon emission governance: The mediating role of financial leverage

Guangyu Guo, Ouwen Lin, Yan Li and Jiyang Ruan

International Review of Economics & Finance, 2024, vol. 96, issue PC

Abstract: This study examines the impact of board composition and CEO behavior on corporate carbon management across 2012–2021. Based on agency theory and resource dependence theory, this study establishes panel quantile regression and mediation effect models to analyze the impact of corporate governance composition and financial leverage on corporate carbon emissions. The findings reveal that diverse boards reduce carbon emissions, highlighting the value of inclusive decision-making. Additionally, the relationship between board size and emissions follows a U-shaped curve, suggesting an optimal size for efficient decision-making; overconfident CEOs tend to increase emissions due to their optimistic risk assessments; and financial leverage further moderates the impact of board size on emissions. This study demonstrates the importance of environmentally responsible leadership and offers insights into how board composition and CEO attributes shape corporate environmental strategies.

Keywords: Corporate governance; Carbon emissions; Financial leverage; Mediating effects; Nonlinear relationship (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:96:y:2024:i:pc:s1059056024007263

DOI: 10.1016/j.iref.2024.103734

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